Richard Sloan from the University of Michigan was first to document what is referred to as the "accrual anomaly". His 1996 paper found that shares of companies with small or negative accruals vastly outperform (+10%) those of companies with large ones.
As of Dec. 2023, Archer-Daniels Midland Co has a Sloan Ratio of 1.05%, indicating the company is in the safe zone and there is no funny business with accruals.
Archer-Daniels Midland Co Sloan Ratio % Historical Data
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Competitive Comparison of Archer-Daniels Midland Co's Sloan Ratio %
For the Farm Products subindustry, Archer-Daniels Midland Co's Sloan Ratio %, along with its competitors' market caps and Sloan Ratio % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Archer-Daniels Midland Co's Sloan Ratio % Distribution in the Consumer Packaged Goods Industry
For the Consumer Packaged Goods industry and Consumer Defensive sector, Archer-Daniels Midland Co's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Archer-Daniels Midland Co's Sloan Ratio % falls into.
Archer-Daniels Midland Co Sloan Ratio % Calculation
Earnings contain a lot of non cash earnings which is called accruals. The Sloan ratio is a way to identify firms with low non-cash or accrual-derived earnings relative to their cash flow.
Archer-Daniels Midland Co's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
Archer-Daniels Midland Co's Net Income for the trailing twelve months (TTM) ended in Dec. 2023 was 1092.78 (Mar. 2023 ) + 855.621 (Jun. 2023 ) + 769.277 (Sep. 2023 ) + 518.105 (Dec. 2023 ) = €3,236 Mil.
Archer-Daniels Midland Co's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2023 was -1503.74 (Mar. 2023 ) + 2315.807 (Jun. 2023 ) + 929.504 (Sep. 2023 ) + 2355.773 (Dec. 2023 ) = €4,097 Mil.
Archer-Daniels Midland Co's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2023 was -306.352 (Mar. 2023 ) + -261.209 (Jun. 2023 ) + -421.65 (Sep. 2023 ) + -398.895 (Dec. 2023 ) = €-1,388 Mil.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Archer-Daniels Midland Co (WBO:ARDA) Sloan Ratio % Explanation
A former University of Michigan researcher, Richard Sloan's 1996 paper found that shares of companies with small or negative accruals vastly outperform (+10%) those of companies with large ones. In fact, for the 40-year period between 1962 and 2001, buying the lowest accrual companies and shorting the highest accrual companies resulted in an average annual compounded return of 18%, more than double the S&P 500's 7.4% annual return over the same period.
If the Sloan Ratio is between -10% and 10%, the company is in the safe zone and there is no funny business with accruals.
If the Sloan Ratio is less than between -25% and -10% on the negative side, and between 10% and 25% on the positive side, this is a warning stage of accrual build up.
If the Sloan Ratio is less than -25% or greater than 25%, and this ratio is consistent over several quarters or even years, be careful. Earnings are highly likely to be made up of accruals.
As of Dec. 2023, Archer-Daniels Midland Co has a Sloan Ratio of 1.05%, indicating the company is in the safe zone and there is no funny business with accruals.
Archer-Daniels Midland Co Sloan Ratio % Related Terms
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Archer-Daniels Midland Co (WBO:ARDA) Business Description
Archer-Daniels Midland is a major processor of oilseeds, corn, wheat, and other agricultural commodities. The company is also one of the largest grain merchandisers through its extensive network of logistical assets to store and transport crops around the globe. ADM also runs a nutrition business that focuses on both human and animal ingredients and is a large producer of corn-based sweeteners, starches, and ethanol.
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